Does Gambling Influence Stock Markets Around the World?

Is there any association between the country’s stock market and its gambling policy? Surprisingly, yes, and there’s more to it than one would think. In a new research paper, Kumar, Nguyen and Putnins offer a complex study of gambling activities in 38 countries worldwide to estimate the impact on their financial markets.

The research’s dataset follows that around 86% of the estimated total global gaming revenue comprises traditional gambling forms — casinos, lotteries, sports betting, and many others. Moving to the financial markets, the authors introduce a split of stocks into lottery-like and non-lottery stocks to estimate the amount of gambling in stock markets. Lottery-like stocks are expected to be traded much more often than other stocks. It turns out that 14% of developed markets, 18% of emerging ones and 33% of retail-dominated Asian markets (China, Thailand) is being gambled. Generally, there is 3.5 times more capital gambled in the stock market around the world compared to the traditional ways combined together.

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